HomeMy WebLinkAboutReso 136-2005
RESOLUTION NO. 136-21005
CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA
A RESOLUTION ADOPTING FINDINGS AND AUTHORIZING
EXECUTION OF A SUBORDINATION AGREEMENT FOR THE
GRAND OAK AFFORDABLE HOUSING PROJECT
WHEREAS, on March 9, 2005, the Redevelopment Agency of the City of South San
Francisco authorized the execution of a Construction Loan Agreement and the provision of a loan in
the amount of $3,500,000 (the "Loan") to Grand Oak Associates, a California limited partnership
affiliated with BRIDGE Housing Corporation (the "Developer") to develop an affordable housing
project on Oak and Grand Avenues (the "Project"); and
WHEREAS, in connection with the Loan, the Develope:r and the City executed an Affordable
Housing Agreement and a Rent Restriction and Right of First Refusal Agreement (collectively the
"Agreements"); and
WHEREAS, pursuant to the Agreements the Developer has agreed to restrict the rents for 21
of the units developed as part of the Project to affordable llevels and to provide the City with
purchase rights in the event that the Project or any unit tht:rein is offered for sale prior to the
expiration of the term of the Agreements; and
WHEREAS, the California Statewide Communities Development Authority ("CSCDA") will
issue bonds in the amount of$11 ,372,000 for the Project, and CSCDA has assigned its rights under
the bond documents to Silicon Valley Bank ("Lender"), which will provide construction and
permanent financing for the Project; and
WHEREAS, the Lender has indicated that it would be unwilJling to provide construction and
permanent financing for the Project without subordination of the Agreements, and the Developer has
indicated that it has been unable to find alternate sources that would enable it to finance the Project
without subordination of such documents; and
WHEREAS, the proposed Subordination Agreement provid1es the Agency and the City with
rights to receive notice and to cure defaults arising under the senior loan documents; and
WHEREAS, the Lender has indicated that it would be unwilling to provide construction and
permanent financing for the Project without the Omnibus Rider modifYing the Deed of Trust and the
Regulatory Agreement.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San
Francisco as follows:
Section 1. The City Council finds that without subordination of the Agreements an
economically feasible alternative for financing the Grand Oak housing development is not
reasonably available.
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Section 2. The City Council authorizes the City Manager or his designee to execute a
Subordination Agreement and Omnibus Rider substantially in the form on file with the City Clerk
and to take such other actions reasonably necessary to carry out the intent of this Resolution.
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I hereby certifY that the foregoing Resolution was regularly introduced and adopted by the
City Council of the City of South San Francisco at a Regular meeting held on the 14th day of
December 2005 by the following vote:
AYES:
Councilmembers Mark N. Addiego. Pedro Gonzalez and Karvl Matsumoto,
Vice Mavor Richard A. Garbarino and Mayor Joseph A. Fernekes
NOES: None
ABSTAIN: None
ABSENT: None
ATTEST:
1; .0
/<_ -I~J I a. r71 , /"'r..J jJt L
. City Clerk
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